Vietnam opens doors to investors in banks, telecom

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Nguyen Tan DungVietnam’s prime minister Nguyen Tan Dung said the government will allow greater foreign ownership of local banks of up to 49 per cent as the it seeks to revive growth in the country.

He also wants to make state companies more competitive and remove their protection. State enterprises will need “to operate in the market economy,” Dung said in an interview with Bloomberg.

“We will treat them as equal to other enterprises,” he added.

There are also plans to sell shares in companies such as Vietnam Airlines, Vietnam Posts & Telecommunications Group, and Vietnam Oil & Gas Group, he said, without giving a specific time frame for divestment.

Dung also said he is considering increasing the foreign ownership limit in banks and telecommunication companies. Total foreign ownership in any lender is currently limited to 30 per cent and the holding of any single foreign investor at 20 per cent. Those limits curb offshore interest in Vietnamese banks.

Vietnam has reduced the number of companies that are wholly-owned by the government to 1,300 from 12,000, Dung said.

“We will narrow down the areas of operations for them,” he said. “The focus will be mainly on infrastructure.”

Meanwhile, Vietnam continues to struggle with inflation which is expected at 7 per for 2013. The government plans to devalue the dong because it considers it overvalued against the dollar, Dung said. The timing of a devaluation is “dependent on the market,” he added.

Vietnam devalued its currency by 1 per cent in June, the first move since 2011, and the central bank has said any adjustments to the dong’s value in 2013 would be within a 3 per cent range. The dong has weakened 1.3 per cent against the dollar in 2013 so far.

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Reading Time: 1 minute

Vietnam’s prime minister Nguyen Tan Dung said the government will allow greater foreign ownership of local banks of up to 49 per cent as the it seeks to revive growth in the country.

Reading Time: 1 minute

Nguyen Tan DungVietnam’s prime minister Nguyen Tan Dung said the government will allow greater foreign ownership of local banks of up to 49 per cent as the it seeks to revive growth in the country.

He also wants to make state companies more competitive and remove their protection. State enterprises will need “to operate in the market economy,” Dung said in an interview with Bloomberg.

“We will treat them as equal to other enterprises,” he added.

There are also plans to sell shares in companies such as Vietnam Airlines, Vietnam Posts & Telecommunications Group, and Vietnam Oil & Gas Group, he said, without giving a specific time frame for divestment.

Dung also said he is considering increasing the foreign ownership limit in banks and telecommunication companies. Total foreign ownership in any lender is currently limited to 30 per cent and the holding of any single foreign investor at 20 per cent. Those limits curb offshore interest in Vietnamese banks.

Vietnam has reduced the number of companies that are wholly-owned by the government to 1,300 from 12,000, Dung said.

“We will narrow down the areas of operations for them,” he said. “The focus will be mainly on infrastructure.”

Meanwhile, Vietnam continues to struggle with inflation which is expected at 7 per for 2013. The government plans to devalue the dong because it considers it overvalued against the dollar, Dung said. The timing of a devaluation is “dependent on the market,” he added.

Vietnam devalued its currency by 1 per cent in June, the first move since 2011, and the central bank has said any adjustments to the dong’s value in 2013 would be within a 3 per cent range. The dong has weakened 1.3 per cent against the dollar in 2013 so far.

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